Serial Entrepreneur from Alberta, Canada: Michael Sikorsky, CEO of Robots and Pencils (Part 4)

Sramana Mitra: This is a very common scenario in technologies trying to start their first ventures. They end up building technology, which essentially turns out to be a solution looking for a problem to solve. How did you maneuver out of that situation?

Michael Sikorsky: As you’re in that situation, you can feel it but you can’t connect. Whatever you have, people just don’t want, but they’re willing to keep talking to you because they somehow can sense the value. They can somehow sense that you have some expertise. Through that, all of a sudden, opportunities emerged where essentially, people who were working with us who were business owners were then giving me feedback like, “What you really need to do is say that this part of the framework is for e-commerce engines. This is how e-commerce engines can plug it in.” Another would say, “You need to take this piece and this piece and chop it out of the framework, and call that X.” I would say being phenomenally open and phenomenally coachable was important because I think of it as just swimming in the ecosystem. You start to hear which way to go.

Sramana Mitra: Who coached you through that transition?

Michael Sikorsky: Clients. People who recognized that there was value in us, but couldn’t quite figure out what we were trying to sell and how the business would work. Somehow, they would buy our product. They would actually buy our framework and say to me, “I don’t even know why I’m buying this. We want just your brains to help us out.” They work with us. Because they have been in business for years, they become natural or implied mentors.

Sramana Mitra: How long was it from that point when you started getting feedback from clients were you able to reposition the product and pivot to something that had product-market fit?

Michael Sikorsky: The actual period was 18 months. I would never forget that.

Sramana Mitra: That’s a very critical 18 months, right?

Michael Sikorsky: Yes. It actually should have only taken about six weeks.

Sramana Mitra: If you knew what you were doing, it would have taken six weeks.

Michael Sikorsky: We had spent so much time on this. The desire of the people in the firm was to try and keep going. In fact, it was a natural fight that I actually had with my partner. I’m trying to be hyper-specific. We had a huge fight. I was like, “This isn’t working. The only reason people are buying our software is they want access to our brains. That’s not how we are going to build the business.” That was my words almost verbatim. I was like, “I know you’re not supportive of this but I’m taking a few guys off the team and we’re going to try and carve off some of these ideas that people have been giving me.” I think there’re three of us. We were only about 20 people.

We started to take these things that people had recognized as deeply valuable as toolset and frame them up so that they would make sense in a product. We took a piece of out of Jayboh and called it LF5. LF5 was a very specific GUI for remotely looking and knowing what’s going on with your web application. Anyone that deployed web applications to any of their clients or to their own customer wanted to be able to monitor and remotely view logs turned out to be a problem everybody had. Of course, we had that built into our stack but no one wanted all of our crappy framework. We wanted that piece. We carved that piece out and put it for sale. It was day seven or day nine when I got an email from Daemler Crysler. At that time, I think it was Babble Fish. You can convert something. I was converting this and I realized that it was a purchase order for 1,700 units. That was the difference. That was the day that everything changed in the business.

Sramana Mitra: This is what year?

Michael Sikorsky: This is 1999 to 2000.

Sramana Mitra: How much revenue did you do that year?

Michael Sikorsky: We started to grow exponentially and then we were bought by a US firm.

Sramana Mitra: How much revenue did you do that year before getting bought?

Michael Sikorsky: I think we were nothing before. We were surviving off investor dollars. We were on a run rate to maybe $5 million to $8 million.

This segment is part 4 in the series : Serial Entrepreneur from Alberta, Canada: Michael Sikorsky, CEO of Robots and Pencils
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